Arco Vara — M&A Activity 2026

May 13, 2026

Arco Vara AS completed the disposal of a 25% stake in the Bulgarian development project Botanica Lozen

Arco Vara AS completed the disposal of a 25% stake in the Bulgarian development project Botanica Lozen

On 12 May 2026, Arco Vara AS completed the disposal of a 25% stake in the
Bulgarian company Botanica Lozen EOOD to Kamaleo Invest OOD. Arco Vara AS
published a stock exchange announcement regarding the transaction on 13 March
2026 in connection with entering into an agreement for the partial sale of its
Bulgarian subsidiary (Arco Vara AS Signs Share Purchase Agreement for Partial
Sale of Bulgarian Subsidiary
(https://view.news.eu.nasdaq.com/view?id=1426204&lang=en)).

Simultaneously with the completion of the transaction, the parties entered into
a shareholders' agreement and a project management agreement, pursuant to which
Kamaleo Invest OOD will manage the residential development project of Botanica
Lozen EOOD. The local partner's responsibilities include organising the
activities necessary for the implementation of the project, including
coordination of design and construction activities, permitting procedures,
procurement processes and management of the sales process.

The amounts payable to Kamaleo Invest OOD depend on the proper completion of the
project stages. If all project stages are completed in accordance with the
agreed timeline and conditions, Kamaleo Invest OOD shall be entitled to receive
service fees of up to EUR 576 thousand in total and up to 40% of the project
profit. The profit share will be determined based on the net cash flow generated
after the completion of each project stage, taking into account, among other
things, tax liabilities, working capital requirements, capital expenditures,
cash flow requirements and debt obligations. The parties aim to complete the
entire Botanica Lozen EOOD development project by July 2029 at the latest.

Following the transaction, the issuer retains control over Botanica Lozen EOOD
and will continue to consolidate the company in its consolidated financial
statements in accordance with IFRS standards.

The transaction does not have a material impact on the issuer's consolidated
income statement or the volume of consolidated assets and liabilities. As a
result of the transaction, the share of non-controlling interests in
consolidated equity will increase by approximately EUR 2.2 million. The
transaction price exceeds the carrying amount of the disposed interest by
approximately EUR 25 thousand, which will be recognised directly in equity in
accordance with IFRS standards.

Botanica Lozen is Arco Vara's residential development project located near
Sofia, the capital of Bulgaria, under which family homes will be developed in
three stages. Homes in the first stage of the development have been completed
and sold. Preparations for the second stage are ongoing, and construction is
planned to commence in the summer of 2026.

As Kamaleo Invest OOD holds a qualifying holding in Botanica Lozen EOOD, a
significant subsidiary of Arco Vara AS, the transaction constitutes a related
party transaction. The transaction does not qualify as a significant transaction
within the meaning of the "Requirements for Issuers" rules and regulations of
Nasdaq Tallinn Stock Exchange.

Darja Bolshakova
CFO
Arco Vara AS
[email protected] (mailto:[email protected])